Sacramento Sheriff’s department overcharged federal government for Folsom Dam security, audit finds

A U.S. Office of the Inspector General audit found the Sacramento Sheriff’s Department overcharged the federal government nearly $315,000 for its security services at the Folsom Dam.

The office identified $314,565 in “questioned costs” that exceeded contract agreements with the Bureau of Reclamation during a three-month period in 2017 that it reviewed. The audit, published Tuesday, found overcharges for indirect labor hours and hourly rates, incorrectly accounting hours on invoices, and failing to conduct required ethics and IT training.

Since 2007, the Bureau of Reclamation has contracted with the sheriff’s department to provide security in several multimillion-dollar contracts.

The sheriff’s department charged the Bureau of Reclamation about $214,000 in indirect labor — such as sick, vacation and training hours — that it believed were allowed in the contract, according to the audit. The federal government, however, does not pay for those hours in time-and-materials contracts such as the one secured with the sheriff’s department.

“The SCSD (redacted) maintained, ‘Given the preapproval of the billed costs, along with the detailed review and approval process, I do not agree that the contract was overcharged for services,’” the audit stated.

The department also did not agree with the audit’s claim that it overcharged the federal government about $100,000 for hourly rates above what was approved in the contract, according to the audit.

“They provided total labor costs and total hours, but did not divide costs by hours to establish a per-hour labor rate,” the audit stated. After calculating the per-hour rate, the audit “determined that it was based on actual costs per month instead of the agreed-upon personnel cost line items in the contract.”

In addition, five of the 50 timesheets reviewed by the audit included payroll hours that did not match those on the invoice activity log, and proper IT and ethics training was not conducted as stipulated in the contract.

The department told auditors that the Bureau of Reclamation never provided training, and “never followed up on the need for training,” the audit found.

“The sheriff’s employees at the Folsom Dam will gladly participate with any training that is offered by Reclamation. However, this training was not offered and not needed because Sheriff’s employees will never use the USBR computer network,” Sheriff Scott Jones told auditors in a letter.

Jones also told auditors that the department conducts regular internal ethics training not specific to federal government contracts.

After its initial contract expired, the U.S. Bureau of Reclamation awarded the department a firm-fixed-price contract of about $30.3 million for the period starting in 2012 and ending in 2016. The contract was later extended, and in June 2017, the U.S. Bureau of Reclamation awarded the department a new 6-month contract for about $3 million, which was also later extended.

Earlier this month, the sheriff’s department secured a new contract with the Bureau of Reclamation for a maximum of $30 million for up to four and a half years starting April 1.

“At the end of the day, it is clear they were satisfied with the level of service provided by the Sacramento County Sheriff’s Office,” Sacramento County Sheriff’s Department spokesman Sgt. Shaun Hampton said.

The Bureau of Reclamation must respond to the audit report by May 10, including plans to resolve the overcharges with the sheriff’s department.